"We have ended our pilot program in this market," eBay said in a statement. "We have been refocusing our resources on our core marketplace business and have determined that this initiative did not warrant continued time and attention."

The eBay Media Marketplace site remained up until yesterday, when eBay posted a notice that it was shut down. Ebay has also closed the portion that allowed for buying radio time in 300 markets via a partnership with Bid4Spots.

With cable networks barely offering any time for sale, even willing buyers--the likes of Microsoft and Hewlett-Packard--were left with few options to spend on the platform.

Still, despite complaints from the cable industry that the functionality of the Marketplace was flawed, a handful of deals were made.

The Oxygen network closed six-figure deals with Intel and Home Depot, while TV One also reached an agreement with Home Depot. Intel became a first-time advertiser on Oxygen in the process.

Officially, the Marketplace never made it past test mode, with eBay looking to sign up cable networks to participate and perhaps add broadcasters later. Advertisers could float an RFP requesting the number of GRPs they were seeking; demos they wished to target; and dayparts they wanted to advertise during. A network could then respond with an offer.

But while independent networks Oxygen and TV One viewed the system as a venue to gain new business, leading cable networks refused to participate and brought its demise. In addition to functionality questions, networks felt the Marketplace would commoditize their inventory--arguing that time would be bought and sold based on factors that didn't differentiate one network from another, perhaps leading to lower pricing.

They also argued that the system wasn't in tune with the new ways deals were being made, where multi-platform and other added-value elements play a major role. But the system allowed for buyers and sellers to exchange comments, and its backers argued it could accommodate multi-tiered deals (the Oxygen deals included sponsorship extras).

Ebay declined comment on specifics of why the Marketplace failed to gain traction.

Its proponents said the Marketplace wasn't intended to replace the face-to-face deal-making that drives the industry. Instead, it could facilitate sales of more run-of-the-mill inventory, which would allow buyers and sellers to spend more time on the increasingly complex deals.

Still, in addition to cable opposition, other issues may have hindered the Marketplace. While major networks had no interest, they might have taken a second look if advertisers had enticed them with potentially lucrative deals.

However, advertiser interest apparently never reached the level that eBay and the system's backers thought it would. The group of advertisers that initially supported the system in mid-2006--which included Microsoft, HP, Home Depot, Intel as well as Toyota and Wal-Mart--indicated early on that they would pool together $50 million to spend, which never materialized.

Also, many executives at agencies who championed the system left their positions, including Magna Global's Bill Cella, PHD's Steve Grubbs and Carat's Ray Warren. And some executives at the advertisers themselves committed to the system shifted roles.

At least one executive questioned why eBay itself didn't initially commit to spend dollars on the system. But last fall, it instructed its agency OMD to buy time for its holiday push, and closed several deals.

The cable industry's objections were spearheaded by its trade group, the Cabletelevision Advertising Bureau. At one point, its chief Sean Cunningham brushed the effort aside as "evidence of someone developing a system in eBay that, despite the best counsel of top buyers in the business, was just not getting the scope of this business in terms of both current and future practice."

Ebay said it was willing to accept guidance from those "that would like to have a hand in helping us develop new functionality required to make this marketplace a more useful adjunct to their existing business."

While the Marketplace is defunct, online buying and selling playing a large role in the industry may be inevitable. Google has a limited auction-based system up and running.

While the Marketplace's radio aspect has collapsed, partner Bid4Spots (which actually powered the system) continues to offer online radio auctions--as does Google.

This news story is important. I recommend that everyone read it.